Is an Income of 5 Lakh Tax-Free in India? Understanding Section 87A

Discover if an income of 5 lakh is tax-free in India and learn about Section 87A's tax rebate.

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As of the financial year 2020-21, an income up to ₹5 lakh is tax-free in India due to a rebate under Section 87A. This rebate ensures that individuals with a taxable income not exceeding ₹5 lakh get a full tax rebate of up to ₹12,500, effectively making their tax liability zero.

FAQs & Answers

  1. What is the tax exemption limit under Section 87A? As of the financial year 2020-21, the tax exemption limit under Section 87A is ₹5 lakh.
  2. How does the rebate under Section 87A work? The rebate under Section 87A provides full tax relief up to ₹12,500 for individuals with a taxable income not exceeding ₹5 lakh, resulting in no tax liability.
  3. Who is eligible for the tax rebate under Section 87A? Individuals with a taxable income up to ₹5 lakh are eligible for the tax rebate under Section 87A.
  4. Has the tax rebate limit changed since 2020-21? It's essential to check the latest financial guidelines each year, as tax regulations can change; the current rebate limit may differ in subsequent financial years.

Watch More

If you're keen to learn more about taxation in India or related financial topics, we recommend checking out our other videos on tax exemptions, financial planning strategies, and understanding different tax brackets. Staying informed can help you make the most of your income and optimize your tax obligations effectively.

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